Topic: MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 30. (Read 18590 times)

Yeah, I guess I could have phrased my statement better--I have no doubt there are fewer short positions now than there were when MSTR stock was a few hundred dollars higher, because at this point the less risk-averse short sellers have likely covered.  Last I checked, the stock had rebounded from yesterday's disaster, which was probably just that.

And then just now I woke up and saw that bitcoin had fallen further to $21,500.  Yikes!  I'll definitely be watching the stock tomorrow.

accounting fraud ?

"In December 2000, Saylor settled with the SEC without admitting wrongdoing by paying $350,000 in penalties and a personal disgorgement of $8.3 million. As a result of the restatement of results, the company's stock declined in value and Saylor's net worth fell by $6 billion."

I might have said this once or twice or a few dozen times, but "investors" using OPM and leverage and other fiat banking/investment nonsense is not good for Bitcoin. Same goes for Bukele's "investment".

On the bright side, Bitcoin will survive this as it always does. Couldn't care less if Saylor or Bukele survive it.

According to my insiders there is far less short interest than a few weeks back.



There is no point shorting something that is already falling. Usually shorts gather up on appreciating  assets.

The above post in the context of the latest developments being discussed concerning bitcoin's massive crash and the potential consequences for MSTR is almost a non sequitur.  If you can look at me with a straight face and tell me that this is one of the times where bitcoin proved to be more stable than fiat, you ought to be a professional poker player.

Oy-fuckin'-vey!  I wonder who the major shareholders of MSTR are.  Roughly 69% of them are institutions, according to the info on my brokerage site.  And I also wonder how many of them are going to stick with owning the stock.  There's also massive shorting of it as well, which can't be helping things.

Ouch.
According to my computation the recent sell off in Bitcoin is going to cost huge money to MicroStrategy:



Provided we touched the minimum on Coinbase, this quarter MicroStrategy is going to report a huge 647 millions of impairment loss.
Taking the total of impairments to  1.7 Billions, or 151 usd per share.

Strangely on twitter @CrytpoWhale writes https://twitter.com/CryptoWhale/status/1536356226409410560 ?t=dsmtYuC0oAcN-KmF1yqhAg&s=19 that MicroStrategy transferred 2089 BTC to a new wallet on June 13 in order, as he says, to get rid of bags, gives a screenshot of the transaction, but according to the service https://monitor.breadcrumbs.app/dashboard/46/transactions?fbclid=IwAR2XBKFgHZF82Jg2bskOH3RNw4SH_vczvrF4p1zPU5f0EfCrcdfQaMQg9n0 there is no transaction from the addresses associated with Microstategy, and the address from which the transaction was not the one associated with MicroStrategy starts at 1FiDbjCmAu...

Imagine waking up every morning looking at the current btc price and finding out that you have lost close to 1 billion because of the drop. Either way, MSTR is going to go down in history as a company that either makes the best decision by buying all those bitcoins or going to be marked as the company that makes the worst decision ever

Obviously not a fond of the later option but I have no clue of the direction we are heading right now

The red day has just started, the lowest price has hit our portfolio. I dont think it will happen in the short term because the Fed still make a tight policy to handle inflation of their country. Not only the crypto market get the bearish moment but also every risk market get the impact. This will happen more than one month, until the Fed will start relaxing their policy.

Too early in the day.
I started plugging numbers in my excel, but every time I look at the market, I have to update those red calculations. So I gave up.
This is going to hit MSRT balance sheets really hard on the second quarter. A with only a few days left to the end of quarter, it’s a bad news for the accounting department.

I'm surprised no one has bumped this thread today, or maybe it's just too early in the day.

Their stock price dropped about 23.5% since the market opened an hour ago, and I'm wondering what MSTR's shareholders are thinking as regards the company's massive bitcoin investment--or at least those shareholders who bought MSTR for reasons other than it being a bitcoin investment proxy.

True, the rest of the market is sinking today, but nowhere near as much as Microstrategy.  I get that bitcoin's price has dropped roughly 17% over the course of a day, and that that reflects on MSTR's valuation, but damn....that's gotta hurt if you own the stock.

Thanks @fillippone, recently bought some MSTR because of your data. And today is a happy day since I believe I actually own 4.085% more synthetic sats than I thought I did?

129,218 BTC / 11,286,025 shares = 0.01144938 BTC per share.

I am not an accountant, but I think this methodology applies to digital assets only. This is why Micheal Saylor has been so vocal in modifying this (well, the second most important reason).

I'll confess that I haven't read every post in this thread, so I must have missed that bit of info.  The question I have in my head without having gone back to look for the answer is whether those accounting standards apply to cryptocurrency only, or if the FASB has required them in other instances prior to the existence of bitcoin.

Either way, that does suck for MSTR.  But none of this seems to have dampened Michael Saylor's fervor, judging by some videos of him talking (and talking and talking) on Youtube.  He really is a bitcoin zealot, which I don't view as a bad thing by any means.  When CEOs of publicly-traded companies get on the air and heap praise on bitcoin, there's a part of me that just wants to jump up and cheer.

A few days ago I read this news:

Michael Saylor welcomes FASB vote to review crypto accounting standards


Basically, it's very boring stuff about how Microstrategy has t o report their Digital Assets: as you know if you follow this thread, each quarter Microstrategy has to value their Bitcoin Holdings at the lower Bitcoin price revised on the current quarter, if lower than purchasing price.

This isa pretty punitive way of accounting digital goods, as it never allows for a revaluation, bar a sell of the Bitcoin.

This translated in a few losses over the years for MSTR:



In case FASB would allow a mark to market of the bitcoins, then the impairment would have to go, and Microstrategy would be able to write that 1,415 millions back into their balance sheets, for a whopping 128 USD per share.

So, watch those meetings very closely.

MSTR has engaged in a fairly aggressive bitcoin accumulation strategy that has been suggested to rise to the level of a speculative attack on the dollar (at least some people have described MSTR's approach to bitcoin in that kind of a way - which is not completely unfair, even if that characterization might come off as overly-confrontational regarding what MSTR might be doing).

In other words, their first couple of BTC purchases (before the 3rd one in the $19ks) had been right around $10k, and from the start they used decently large portions of their cash reserves initially and then their cashflow subsequently.

Furthermore, they have created investment bonds, encumbered some of their business equity, gotten loans for the purpose of buying BTC, and increasingly put themselves into both debt and also various ways of leveraging long..

Yeah, sure they could shave of some of their BTC and still be in profits on those BTC that they sell, yet if you had not noticed the ideology of MSTR - including but not limited to their leader (Saylor) is not getting caught up in short-to-medium term valuations of BTC in terms of dollars, but instead a kind of longer term play that continues to acquire the asset as if it were the scarce real estate analogy that Saylor employs when talking about bitcoin.

You likely realize that Saylor is far from secret about his views, and essentially has been suggesting that his (and MSTR's) style of aggressiveness should be replicated by others - and he has been pretty damned vocal since around the same time as his Company's first BTC purchase in August 2020 (that spurred fillippone into making this thread too).

Selling for short-term good feelings does not conform with his way of approaching bitcoin as an asset, and surely I have criticized Saylor on a number of occasions for being way more bullish than I would recommend - and especially such an approach would not be as applicable for the vast majority of normies, yet I would not consider that Saylor has even gotten close to putting himself in a pickle - yet even if the public and some of his shareholders likely get nervous about outrageous negative BTC price performance.. that happens sometimes, and maybe has been happening a bit more at this particular stage of bitcoin's market growth than what had been expected.

Another matter is that Saylor (and MSTR) made quite a few BTC purchases (levered as well) in ways that did not appear to have any level of sensitivity to BTC prices, so even though several of his earlier purchases that were employed without leverage and also with excess cash that was available are well into the green, several of his later purchases were made at much higher prices and with leverage - and sure in retrospect, we might consider that he might have been a bit better off to have attempted to strategize buying on the dip a wee bit more, but just Saylor's overall approach and bullish mindset in regards to bitcoin has not allowed him to be price sensitive in any kind of mere mortal way or even in the ways that normies should probably be a bit more price sensitive than Saylor has demonstrated.

Don't get me wrong, I consider Saylor to be smart as fuck in a lot of ways in regards to creating and employing innovative financial instruments to accumulate more BTC, while I have been having my doubts about whether Saylor might have learned any lessons in terms of better approaches to accumulate BTC - or if his (and MSTR's) current seemingly somewhat stressed financial position might not cause him to adapt some of his seemingly gambling (in the sense of overly leveraging) ways.  I am not even patronizing because I am pretty sure that Saylor had already recognize some aspects of these kinds of risks that the BTC price might go down rather than up or sideways, but still there could be some ways that Saylor might either recalculate getting into further buys (such as employing a somewhat HODLer short-term strategy) or just being a bit more strategic on some of his buys in terms of attempting to buy on dips with some of the potential shorter term BTC purchases that he might make.      

Guys can speculate in regards to how selling might be one of the additional tools that Saylor (MSTR) could employ because there seems to be some kind of fantasy about selling BTC to be part of the Saylor (MSTR)'s portfolio management, and it just seems doubtful to me that selling would be any kind of significant or meaningful way of managing MSTR's portfolio.. at least not at these prices.. but maybe if the BTC price goes back up into the $50ks or higher maybe Saylor might consider some kind of selling to be prudent - yet based on pretty strongly held and seemingly consistent statements that Saylor has made, I have my doubts in that regards to him even considering selling BTC in the $100k or $1million price ranges.. and sure, maybe I am misreading him a wee bit in terms of his ideas in regards to the employment of some selling to be healthy for his overall portfolio..

does microstrategy have debentures/bonds/notes that have an option to convert into shares built in ?  if so i'd read the prospectus about that, might explain the discount on the shares if there is possibility of massive share dilution

Well. Actually, it's not so good for Microstrategy.
Next quarter they are going to report at least 315 million digital assets impairment loss.



This is with the current low price level on Coinbase. If they managed to trade bitcoin at a lower level or bitcoin will dump again, the loss will raise more than this.
If bitcoin rallies to 100K, still they won't be able to inflate their holding value until they sell.

If you're talking about the CEO of a publicly-traded company, they'd better be making important tweets that happen to be true as well (lol).  Otherwise, they'd be in deep, deep shit with the SEC and God knows what other alphabet agency they're regulated by, and that's not even taking into consideration potential shareholder lawsuits.  So while I don't think people like Saylor would like to be held to such a standard, I'm fairly sure most of them know the consequences if they give out false or misleading information about their company.  That's a huge no-no in the corporate world.

And no, knowledge and fear of consequences doesn't prevent some of these douchebags from tweeting some wild stuff, but you better believe the company is going to get sued if shareholders (or ambitious lawyers) even think the stock price was adversely affected by said wild tweeting.

Now, I'd been curious the past couple of days about what MSTR's situation is with BTC tanking.  After reading some of the posts here and on some other thread I came across, it doesn't appear to be as bad as I thought it might have been.  I'm keeping fingers and toes crossed that the markets make a recovery, because it seems like everything is down as of late.